The Hong Kong Monetary Authority has granted four new virtual banking licenses to a subsidiary of Ant Financial and three other companies.
The new licenses have been assigned to Ant Financial's Ant SME Services, Infinium, Insight Fintech HK and Ping An OneConnect Company, and have taken effect immediately.
According to their business plans, the newly licensed virtual banks plan to launch services in around 6-9 months.
The fresh allocation takes the number of licensed virtual banks in Hong Kong to eight. To date, licenses have also been allocated to WeLab Digital, as well as Livi VB, SC Digital Solutions and ZhongAn Virtual Finance. The number of licensed banks in Hong Kong has now increased to 160.
“We are pleased to grant four more virtual banking licences. The HKMA is now working closely with the eight virtual bank licensees to prepare for the launch of their business operations in accordance with their plans,” HKMA chief executive Norman Chan said.
“The launch of virtual banks in Hong Kong, which is a key component of the Smart Banking Initiatives, will certainly facilitate financial innovation, enhanced customer experience and financial inclusion.”
The HKMA pledged to closely monitor the operations of the virtual banks after they launch, including customers' reactions to the new banking services and any impact of their entry to Hong Kong's banking sector in general.
The authority plans to conduct a comprehensive assessment around one year after the launch of the first virtual banking service.
According to an Accenture survey of Hong Kong consumers, 68% are already using their smartphones or tablets to check their bank accounts at least once a week, and 43% use their devices to connect with banks and insurers to learn more about products or services.
Meanwhile only 59% of Hong Kong customers said they liked their current bank, and only 24% believe their banks do a good job in offering an attractive digital bank proposition.